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Performance-Based Conditionality: A European Perspective

  • Adam, Christopher
  • Chambas, Gerard
  • Guillaumont, Patrick
  • Guillaumont Jeanneney, Sylviane
  • Gunning, Jan Willem

For several years, the conditionality underpinning budgetary support to developing countries has been the object of severe criticism. This criticism has led to the belief that the “ownership of policies” by the recipient country governments is essential for the effective implementation of economic reform programmes. To this end, it has been suggested that traditional conditionality based on policy measures be replaced by a conditionality in which aid is based on performance outcomes. In this spirit, the European Commission has reformed its adjustment aid. The present article provides an assessment of this experiment based on the experiences in Benin, Burkina Faso, Madagascar and Uganda. It demonstrates the danger of a shift towards intermediate indicators, which are too distant from the final impact of the policies, and suggests several improvements to implement genuine performance-based conditionality.

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Article provided by Elsevier in its journal World Development.

Volume (Year): 32 (2004)
Issue (Month): 6 (June)
Pages: 1059-1070

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Handle: RePEc:eee:wdevel:v:32:y:2004:i:6:p:1059-1070
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  1. Michael Mussa & Miguel Savastano, 2000. "The IMF Approach to Economic Stabilization," NBER Chapters, in: NBER Macroeconomics Annual 1999, Volume 14, pages 79-128 National Bureau of Economic Research, Inc.
  2. Paul Collier & Jan Willem Gunning, 1999. "The IMF`s role in structural adjustment," Economics Series Working Papers WPS/1999-18, University of Oxford, Department of Economics.
  3. Adam, Christopher S. & Gunning, Jan Willem, 2002. "Redesigning the Aid Contract: Donors' Use of Performance Indicators in Uganda," World Development, Elsevier, vol. 30(12), pages 2045-2056, December.
  4. Mohsin S. Khan & Sunil Sharma, 2001. "IMF Conditionality and Country Ownership of Programs," IMF Working Papers 01/142, International Monetary Fund.
  5. Collier, Paul & Guillaumont, Patrick & Guillaumont, Sylviane & Gunning, Jan Willem, 1997. "Redesigning conditionality," World Development, Elsevier, vol. 25(9), pages 1399-1407, September.
  6. C. S. Adam & S. A. O'Connell, 1999. "Aid, Taxation and Development in Sub-Saharan Africa," Economics and Politics, Wiley Blackwell, vol. 11(3), pages 225-253, November.
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